What Matters

Why philanthropy?

Friday, March 9, 2018

Politics, commerce, and technology dominate the news. Philanthropy is covered in exceptional cases when remarkably large sums of money are in play, or when something goes wrong and we see good intentions thwarted or unmasked. You would not be faulted for thinking that philanthropy plays but a minor role in shaping our world. That would be a mistake.

To engage the world effectively, and to understand yourself, you need to understand philanthropy. And the better you understand it the more effective you will be.

Generosity is one of the most potent forces in our daily lives, yet it is too often overlooked. Long before toddlers learn norms of politeness, they respond instinctively to help someone who is dropping an object. Markets and nonviolent politics have a hard time getting going without norms of trust and comity; habits of getting along with an expanding sphere of others built on our capacity for generosity.

We know a lot about living in very complex societies and have succeeded in arranging our affairs without paying a lot of attention to generosity as a force that has been with us through the journey. To keep moving forward, however, we need to pay much more attention to philanthropy.

By making more explicit what is often in the background, we will be more enlightened about our world and ourselves, and more capable of engaging our own generosity and that of others.

Understand philanthropy

Philanthropy is key to our public lives. Giving time and money and advocating for causes accomplishes many useful things. Look around and imagine what the world would be like without universities, houses of worship, hospitals, shelters, and museums and parks, to name a few of the major activities supported by philanthropy. But suppose that you believe that these things could be more effectively provided for by tax dollars, or that more tax dollars should be expended on such efforts because everyone benefits from them?

Many developed countries spend a lot more public money and less philanthropic support on delivering social services and funding cultural and educational institutions than the United States does. There is a robust debate about the role philanthropy should play in supporting public institutions and solving “pressing issues” that affect us all. Given that total giving in the U.S. is about 65 percent as large as non-defense discretionary federal spending, we should all be interested in the role of philanthropy, the players involved, and what we know about their impact.

Beyond the general amount of financial giving in our society, we are seeing more very wealthy people and institutions exerting their influence through giving. Even if you think that some of the companies that have generated terrific wealth should be broken apart or even nationalized, your argument will carry further if you can analyze and communicate about the current era of elite philanthropy. It is both the value created by the companies and giving by their founders and owners that helps secure their status in society. What is their status? Is it warranted? What do you think?

If, on the other hand, you are enamored by the cross-pollination of commerce and philanthropy under the guise of social entrepreneurship or impact investing, you would do well to clarify for yourself how the free market and the “grants economy,” based on giving, complement or clash with each other.

Clearly, philanthropy is at the heart of discussions about the future of our societies.

Beyond the power of wealth to generate a surplus that can benefit the public, our communities and our polity depend on voluntary engagement and civic expression that are compelled by no one. This multitude of voluntary engagements and expressions constitutes the broad sense of philanthropy that shapes our world. So regardless of the work you do in your life, the context of how you choose to shape your communities and your country will be influenced by your philanthropy and those of many others. This context of philanthropy will also influence whatever business, nonprofit, or government you work for.

Study philanthropy

So, to understand the world, you need to study philanthropy. How did social movements change fundamental norms about race and gender, peace and war over time and across cultures? How did the funding of settlement houses change immigration? How will current expressions of solidarity and protest shape our social and political landscape, and how can we inform ourselves about current philanthropic dilemmas by consulting historical antecedents and analogs?

A fuller understanding of the world created by voluntary action, in turn, helps you to be more effective. How do you motivate others to join a cause you care about? Knowing something about this can be handy no matter what “industry” you make your career in, be it public, nonprofit, or for-profit.

But perhaps more important than motivating others is motivating yourself.

To understand yourself, you also need to think about philanthropy. A good education is a process of self-discovery, at the same time that you are preparing to make contributions to others. What do you want to give to the world? What values do you hold dear? What matters to you? Even if you have little patience for examining your own values, doing so will equip you to deal with the beliefs and experiences of others who affect your lot in the world. Knowing what you wish to give will also help you get what you want.

Of course, what you want may change as a result of your philanthropic education.

Philanthropy is not a decorative dusting on the substance of what we do, it is often at the core of why we have the world we do. Understanding it helps you better appreciate the creative wonders of human generosity. With this appreciation you can build your own sense of what you wish to contribute.

So “Why philanthropy?” Because the world is made of it and you should make your mark with it.

Best regards,

Amir PasicEugene R. Tempel Dean

It's time to make your move

Maybe it’s a faint but persistent thought that you’re ready for a new challenge.

Maybe it’s the not-so-faint feeling that you want to give more of yourself to help others make meaningful change in their lives.

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NEW: Weekly podcasts from The Fund Raising School

Distributed each Monday morning, audio of a new episode of “The First Day from The Fund Raising School,” will be available via The Fund Raising School’s app (as well as iTunes and Google Play) and through its webpage.

A video of the podcast will be available on The Fund Raising School’s LinkedIn page.

April 2, They Created a DAF; Did They Put Up a Parking Lot? with Dr. Patrick Rooney, executive associate dean for academic programs, Lilly Family School of Philanthropy

Check out the webpage for recent episodes on topics such as the expected impact of the new federal tax policy on charitable giving, gender differences and social media fundraising lessons from #GivingTuesday, and fundraising fundamentals.

Fleishman to speak on putting wealth to work

Joel Fleishman, professor of law and public policy at Duke University’s Sanford School of Public Policy and former president of Atlantic Philanthropies’ U.S. program staff, will speak in Indianapolis at a free, public event on March 22.

The U.S. nonprofit sector is poised for a transformation in the coming decades, with the nation’s largest transfer of wealth expected to pour $500 billion annually into the sector and new trends in giving portending larger-scale and more innovative forms of grant making by the country’s most prominent philanthropists.

Philanthrocapitalism has acquired some of the trappings of financialization and may have the potential to deliver even greater impact. But will it? And will a focus on short-term impact mean that longer-term institution building will be neglected?

Drawing on insights from his new book, Putting Wealth to Work: Philanthropy Now or Investing for the Future?, Fleishman will tell the unprecedented story of this movement of socially motivated capital and how it may unavoidably change the American economy and the world at large. The event is the fourth lecture in the Lilly Family School of Philanthropy’s 30th Anniversary Speaker Series.

Outlook for 2018 giving mixed

The strength of the U.S. economy and recent changes to federal tax policy will be the key forces to watch as the 2018 philanthropy picture unfolds, according to the new The Philanthropy Outlook 2018 & 2019 report from the Lilly Family School of Philanthropy, presented by Marts & Lundy.

“Some aspects of the new tax policies may have a dampening effect on charitable contributions. Conversely, overall improvements in the economic environment will likely bolster charitable giving,” said Una Osili, Ph.D., associate dean for research and international programs for the school. “While we cannot know exactly how the impact of these factors will play out for philanthropy, we can present multiple research-based scenarios, and the factors that are likely to have significant effects.”

To increase understanding of the unique charitable giving landscape emerging in 2018, the report presents three scenarios detailing potential effects of the combination of tax policy changes and broad economic conditions on charitable giving.

Under the “High Growth” scenario, the Tax Cuts and Jobs Act would build on the momentum generated from the healthy economy at the end of 2017. The loss of tax incentives would have a dampening effect on giving by some households, but the performance of the economy overall would help offset this, and corporate and foundation giving would remain strong.

In the “Uneven Growth” scenario, tax policy changes would primarily benefit corporations and wealthy business owners, with minimal trickle-down effects. While the impact of this scenario would vary across different types of charities, estimates for total giving would hold steady.

In the “Flat Growth” scenario, tax policy changes would have little impact on economic growth, and donors may adapt to tax policies with fewer gains to the charitable sector, preventing the economy from realizing the full benefits of tax law adjustments. Under these circumstances, broad implications for charitable giving are difficult to ascertain.

ThePhilanthropy Outlook also includes a detailed discussion of specific tax policy changes and of economic factors expected to affect giving.